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China Contract Law and CISG Become more Consistent in Provisions on Contract Form and their Applicability
  

Recently, our government has officially notified the Secretary-General of the United Nations to withdraw the declaration that "The People's Republic of China does not consider itself to be bound by article 11 as well as the provisions in the Convention relating to the content of article 11” concerning the United Nations Convention on Contracts for the International Sale of Goods (CISG) (referred to hereinafter as the Convention).The withdrawal has taken effect. Provisions on form of contract and their applicability as provided by our Contract Law have become consistent with that as provided by the Convention.

The Convention is one of the most important international conventions that adjust and regulate purchasing and sales contracts in international goods trade, and one of the most successful uniform laws in international trade up to now. It was officially passed at UN Vienna conference on diplomatic relations, and came into effect as of January 1, 1988. China officially ratified the Convention on December 11, 1986. The Convention has played a positive role in eliminating legal obstacles in international trade and promoting China’s reform and opening up.

Article 11 of the Convention stipulates that a contract of sale need not to be concluded in or evidenced by writing and is not subject to any other requirements as to form. It may be proved by any means, including witnesses. According to this article, international goods sale contract can by concluded in or evidenced by writing, oral and any other forms. Meanwhile, the Convention also allows contracting States to make reservations to declare not to be bound to this Article. As the Law of the People's Republic of China on Economic Contracts Involving Foreign Interest applicable in international trade required contracts to be concluded in writing form, which was inconsistent with the Article 11 of the Convention. Therefore, when submitting the ratification, China declared not to be bound by article 11 as well as the provisions in the Convention relating to the content of article 11". Other countries such as Argentina, Chile, Hungary, Lithuania, and Russia also made reservations about this Article while ratifying or acceding to the Convention.

China promulgated the Contract Law, and abolished Law of the People's Republic of China on Economic Contracts Involving Foreign Interest in 1999. The Contract Law does not make requirement about contract forms and a contract can be concluded in any forms, which has been consistent with the content of Article 11 of the Convention. Domestic academic and industrial circles have suggested for many times to withdraw related declaration, and the Convention also allows States to withdraw declaration. Through careful research and extensive advice, the Chinese government has withdrawn the declaration about article 11 as well as the provisions in the Convention relating to the content of article 11, according to rules of Law of the People's Republic of China on the Procedure of the Conclusion of Treaties and the Convention.

The withdrawal of the declaration effectively solved the conflict between China’s domestic law and the Convention, and made them more consistent in terms of the rules and application of contract form. It can avoid misunderstanding by foreign trade operators and other countries that China law application in contract form is unequal. It can reduce legal obstacles for China’s further development of foreign trade, and is conducive for China to actively integrating into the international community and fully taking part in economic globalization process.

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Approved by: MINISTRY OF COMMERCE,PRC
Jing ICP Bei No.05004093
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